Case Note & Summary
The appellant, Pushpa Sanchalal Kothari, filed a criminal appeal under Section 378(4) of the Code of Criminal Procedure, 1973, challenging the acquittal of the respondent, Aarti Uttam Chavan, by the Judicial Magistrate First Class, Shrirampur, in Summary Criminal Case No.452 of 2013. The appellant had alleged that she extended a hand loan of Rs.80,000 to the respondent, who issued a cheque for the same amount dated 28-03-2013 drawn on Bank of Maharashtra, Shrirampur. The cheque was presented on the same day but was dishonoured on 30-03-2013 due to insufficient funds. A statutory notice was sent on 04-04-2013, but the respondent failed to pay, leading to the complaint under Section 138 of the Negotiable Instruments Act, 1881. The trial court acquitted the respondent, holding that the appellant failed to prove the existence of a legally enforceable debt, noting that the loan was not shown in income tax returns and that the appellant's source of income was not established. The High Court allowed the appeal, setting aside the acquittal. The court held that the trial court erred in not applying the presumption under Section 139 of the N.I. Act, which shifts the burden on the accused to rebut the presumption that the cheque was issued for a legally enforceable debt. The court further held that the source of the complainant's income is not relevant, and the failure to show the loan in income tax returns does not make it an unaccounted amount. The trial court also improperly compared signatures under Section 73 of the Indian Evidence Act. The respondent was convicted under Section 138 of the N.I. Act and sentenced to pay a fine of Rs.1,20,000, with Rs.1,10,000 as compensation to the appellant.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Presumption under Section 139 - Rebuttal - The accused failed to rebut the presumption that the cheque was issued for a legally enforceable debt. The court held that the mere fact that the loan was not shown in income tax returns does not make it an unaccounted amount or invalidate the debt. (Paras 5-10) B) Evidence Act - Comparison of Signatures - Section 73 - The trial court erred in comparing signatures on its own without expert evidence. The court held that such comparison by the judge is not permissible when the accused admits the signature. (Para 5) C) Negotiable Instruments Act - Legally Enforceable Debt - Source of Income - The source of the complainant's income for lending is not relevant to the existence of a legally enforceable debt. The presumption under Section 139 shifts the burden on the accused to prove otherwise. (Paras 5-10)
Issue of Consideration
Whether the acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881 was proper, considering the presumption under Section 139 and the evidence on record.
Final Decision
The appeal is allowed. The judgment and order of acquittal passed by the Judicial Magistrate First Class, Court No.3, Shrirampur in Summary Criminal Case No.452 of 2013 on 17-09-2016 is set aside. The respondent is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to pay fine of Rs.1,20,000, in default to suffer simple imprisonment for three months. Out of the fine amount, Rs.1,10,000 shall be paid to the appellant as compensation.
Law Points
- Presumption under Section 139 of Negotiable Instruments Act
- 1881
- Rebuttal of presumption
- Source of income not relevant
- Comparison of signatures by court under Section 73 of Indian Evidence Act
- 1872
- Hand loan not shown in income tax returns
